IslamicFinance.de

Fitch Ratings #Indonesia has assigned National Long-Term Ratings of 'AAA(idn)' to Indosat Ooredoo's IDR 3,172 bn senior unsecured bonds and IDR 288 bn sukuk ijarah issues. The issues are launched from Indosat Ooredoo's IDR 9 trn bond programme and IDR 1 trn sukuk ijarah programme. Indosat Ooredoo will use the issue proceeds to refinance its existing rupiah debt, and to fund licence fees. The sukuk rating is at the same level as Indosat Ooredoo's National Long-Term Rating of 'AAA(idn)'. Fitch's rating for the certificates reflects the agency's belief that Indosat Ooredoo would stand behind its obligations.

Ivory Coast plans to complete a sale of 150 billion CFA francs ($263 million) worth of Islamic bonds, following Togo's debut sale of sovereign sukuk launched last month. The two West African nations join Senegal in tapping the market for sukuk, expanding the use of Islamic financing options outside the Middle East and Southeast Asia. The Ivory Coast will sell the 7-year sukuk using ijara with the subscription period closing on Aug. 31. This represents the second phase of a 300 billion CFA franc sukuk programme set up last year by the Ivory Coast. Togo plans to complete the sale of its sukuk later this week, aiming to raise 150 billion CFA franc with a 10-year maturity and a 6.5% yield. The lead arranger for both the Togo and Ivory Coast sukuk is the Islamic Corporation for the Development of the Private Sector (ICD).

Kuveyt Türk Katilim Bankasi has closed the first half of 2016 with a net profit of TRY 256 million with an increase by 24.4% compared to the same period last year. The bank's total assets have reached 44,1 billion increasing by 4.9% and its shareholders equity has reached TRY 3.7 billion increasing by 8%. Ufuk Uyan, the CEO of Kuveyt Türk, said the bank added 30 new branch offices to its network throughout 2016. Kuveyt Türk aims at becoming one of the top three banks opening the highest number of branch offices in the banking sector.

The #Bahrain based Al Baraka Banking Group (ABG) announced that it achieved an increase in total operating income of 7% and net profits before tax and provisions by 4% during the first half of 2016. Total assets increased by 2%, total finance and investments by 4%, deposits by 1% while total equity increased by 2% as at the end of June 2016. Total operating income reached US$ 538 million in the first half of 2016 compared to US$ 502 million during the same period of 2015. Al Baraka's CEO Adnan Ahmed Yousif said the Group opened 24 new branches in the first half of 2016 to bring total branches to 611. He considers the entry of the Group to Morocco market a very important achievement, because it represents one of the main markets in the Arab Maghreb and Africa. Also, it means a higher diversification in assets and income sources for the Group.

According to a new report by Thomson Reuters, Islamic finance assets grew by 10% to reach $2 trillion in 2015. Islamic banking represented 73% of these assets, followed by sukuk which represented 17%. The increase in assets was driven by strong growth in all sectors - Islamic banking, takaful, outstanding sukuk and net value of Islamic funds. Islamic finance assets are projected to grow to $3.2 trillion by 2020, with Islamic banking reaching $2.6 trillion. The report added that the sukuk market on the other hand has struggled in the past couple of years due to the global economic uncertainty. Total issuance is expected to be around $70 billion by end of 2016.

Qatar Islamic Bank (QIB) has introduced online instant purchase for its new Travel Takaful plan. From now on, QIB’s customers can conveniently purchase Travel Takaful plan through the Bank’s website www.qib.com. The comprehensive plans are offered by Damaan Islamic Insurance Company (Beema) and provide a wealth of coverages. Benefits include compensation in case of lost/delayed baggage, delay in departures, or in the event of lost passports, National IDs and driving licences.
A key benefit is the coverage of medical expenses incurred abroad, including hospital and surgical costs, dental emergencies and other needs that can occur when traveling.

According to Moody's latest report, the Islamic Development Bank's (IsDB) credit profile is supported by its strong shareholder support, robust capital base and prudent financial and risk management policies. While facing a risky operating environment due to geopolitical tensions in the MENA region and lower oil prices, the IsDB's operational assets continue to perform well. The bank's gross operational assets have been steadily growing over time and rose 11.7% year-on-year in 1436H, but the pace of that growth will likely slow in the next few years. The overall credit quality of the bank's portfolio is solid, well diversified in different countries and sectors. Its liquidity is solid, with liquid assets making up 23.6% of total assets.

Bank Mandiri, Indonesia's biggest bank by assets, is set to meet the 300 million ringgit ($74 million) capital requirement to operate as a full banking branch in Malaysia. Financial authorities from Indonesia and Malaysia signed a bilateral agreement allowing greater access for lenders from both countries to fully operate in the respective jurisdictions. Bank Mandiri will open several new offices and a string of ATMs in the country, though it will not specifically target the retail banking market in Malaysia. Mandiri had already opened one subsidiary in Malaysia called Mandiri International Remittance whose service is limited to sending money to and from Indonesia. When it has a full branch in Malaysia, it will also be able to offer credit services.

Tun Abdullah Badawi, the former Prime Minister of #Malaysia, has launched the Waqf (Islamic Endowment) crowdfunding platform or WaqfWorld. The new platform was announced at the 12th World Islamic Economic Foundation Forum (WIEF) held in Jakarta last week. The platform was developed in partnership with EthisVentures.com. Founding patron, Tun Abdullah Ahmad Badawi saw the potential of Waqf Crowdfunding to develop the whole community of Muslims. WaqfWorld.org does not charge beneficiaries or users any fees. The platform is completely free during the initial phase. Operational costs will be partially borne by voluntary contributions, and other resources provided by Ethis Ventures.

Technology financier Malaysia Debt Ventures Bhd (MDV) plans to raise RM1bil via sukuk in the fourth quarter of this year. The planned issuance is aimed to increase MDV's lending ability including to start-ups. CEO Datuk Md Zubir Ansori Yahaya said the new sukuk issuance would likely have a government-guarantee status. Md Zubir said the funds from the new sukuk, which will likely have a 10-15 year tenure, could be rolled out and replenished until end-2017. To-date, MDV has approved a total of RM9.8bil in financing support to 700 innovation, technology and information technology-based companies including Iris Corp, Puncak Semangat and MOL Global Inc.

The Central Bank of Nigeria (CBN) recently released a new categorization system for "Non-Interest Islamic Microfinance Banks" (NIMFBs). CBN organized NIMFBs into three categories: "Unit", "state" and "national". Unit NIMFBs must have a minimum capital of NGN 20 million (USD 71,000) and may open one branch location within the same municipality as the organization’s headquarters. State NIMFBs may operate in one state if they maintain minimum capital of NGN 200 million (USD 350,000). Institutions in this category may open multiple branches in the state within which their headquarters are registered. A national NIMFB is permitted to operate in any state or territory of Nigeria so long as it holds NGN 2 billion (USD 7 million) in capital.

President of the #Philippines Rody Duterte announced the need to help the people of the Autonomous Region in Muslim Mindanao (ARMM). Al-Amanah Islamic Investment Bank of the Philippines (AAIIBP) is the only bank authorized to conduct Islamic Banking business in the country. The AAIIBP total Assets for the month of July 2016 is P785.66 million, a decrease from previous month’s total assets of P795.05 million. In comparison to the same period last year, there is an increase of P6.58 million in total assets largely due to higher deposit levels in 2016. According to lawyer Arifa Ala, there is a significant untapped market opportunity for banks in the Philippines, because only about 30% of Filipino adults have deposit accounts at a financial institution.

Inflows in debt vehicles issued by Muslim Southeast Asian nations have increased in the recent past. Malaysia and Indonesia are greatly benefiting from their current monetary easing policies, relaxed tax policies and government infrastructure spending programs. The Pan-Borneo Highway project adds to other sukuk issuances, among them a $1.3bn-offer by Sarawak Hidro, the state-owned developer of Malaysia’s biggest hydropower project, also on Borneo Island. Other infrastructure sukuk in the queue are a $440mn-issuance for the bridge connecting Peninsular Malaysia with Penang island and a $892mn-issuance for a highway network. Indonesia’s government is also enlarging the scope of sukuk-backed investment in roads and railways. However, the state budget is only capable of contributing 30%, which means that a large number of future issuances can be expected, with its uptake spurred by generous tax incentives.

QIIB announced the issuance of a QR1bn sukuk within the first tranche of the bank’s capital boost through a local issue. The new sukuk issuance supports the bank's equity and meets Basel 3 requirements and enhances its plans for expansion. With the new issue the bank’s capital adequacy will increase to about 20%, well above the Qatar Central Bank requirements set at 12.5%. Moody’s has affirmed the Bank’s rating this year at A2, Fitch Ratings at A+ and Capital Intelligence at A- with a positive outlook.

The Islamic Advisory Group (IAG) for Polio Eradication has adopted a new work plan to end polio in Pakistan and Afghanistan. The announcement came at the third annual IAG meeting held at the Islamic Development Bank’s headquarters in Jeddah. In a statement issued by the meeting, the IAG affirms the religious obligation of parents to vaccinate their children to keep them healthy. According to IAG deputy Dr. Abbas Shouman, the misperceptions usually arise due to fatwas issued by non-specialists who leave children exposed to handicap or death. IDB president Dr. Ahmad Mohamed Ali urged the partner institutions of the IAG to coordinate with WHO to transfer their experience in polio to other emergency and epidemic situations, particularly in Africa.

There is little escape from the volatility that the Brexit vote has wreaked. Islamic banks' partiality for UK real estate could be particularly painful if property prices fall, as they are predicted to, by as much as 10%. Islamic banks' overreliance on the property sector is well documented, and Britain has long been a favourite destination for real estate investment. The biggest issue facing the UK financial services sector is whether institutions will retain their passporting rights. There is much at stake for Britain too. Islamic finance plays a significant role in infrastructure development in the UK, from The Shard to the Olympic Village. Over 6500 homes are currently being financed by a GBP 700 million investment by Gatehouse Bank. The UK cannot afford to lose this funding, especially when investment from Europe dries up.

As religious borrowers are not able to pay interest lenders have found alternatives to help them purchase and keep home. American Finance House LARIBA has worked to finance and refinance non-interest or riba free (RF) faith-based mortgages since 1987. These RF programs consist of the bank first determining whether the value of the property accurately reflects the value of other home prices in the area. LARIBA's finance model is based on renting properties, not money, then it invests in the property by lowering the market monthly rent to make the monthly payment competitive with other banks. LARIBA creates a lien with the customer that will progressively apply rent payments to ownership of the property.

Executives of Indonesian and Malaysian stock markets signed on Tuesday a Memorandum of Understanding (MoU) on the establishment of a World Sharia Stock Market Center. Signing of the document was conducted by Indonesia Stock Exchange President Director Tito Sulistio and his Malaysian counterpart Tajuddin Bin Atan. The planned center aims to develop Sharia products and portfolios for stock markets, but also to train human resources to become competent, professional and skillful persons in the industry. Global Sharia financial market was estimated to expand to USD 3.24 trillion by 2020.

Indonesia's sukuk market is thriving. The Southeast Asian nation raised US$2.5 billion from its sale of US dollar Islamic bonds in March, snatching orders for over three times the amount offered. It was the biggest ever Asian US dollar sukuk offering. Indonesia’s government is speeding up investment in roads and railways amid pressure from President Joko Widodo. Even with a reduced allocation this year, Indonesia’s Public Works Ministry has spent a bigger proportion of its budget in the first half compared with 2015.

Australian Islamic investment company Crescent Wealth and KAF Investment Funds have jointly launched the KAF Australian Islamic Property Fund (KAIPF). Crescent Wealth corporate strategy director Omar Khan said the fund would achieve 9-10% annual return to investors, a target driven by the appetite of Malaysian investors for Australian property. The KAIPF is Malaysia’s first fund that provides non-institutional investors direct access to Australian commercial property. The launch of KAIPF brings the total number of funds under KAF to 18, with close to RM2.3 billion worth of assets under management.